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Owner Motivations in the UK Speciality Food Sector

Author

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  • Andrew D. Bugg

    (Centre for Competition Policy and School of Economics, University of East Anglia)

Abstract

This paper investigates empirically whether owner motivations are consistent with neoclassical models of profit maximisation. Contrary to the neoclassical model, in some markets owners gain private benefits from supplying products with certain characteristics. To consider this issue, a full theoretical model that allows owners to consider not only profit, but also utility, in their choices of price, product quality, and the use of an owner-specific production method was developed. Information was gathered on owner motivations from the UK speciality food sector to test the propositions of the theoretical model. Evidence of systematic utility maximisation is found and utility maximising owners set higher profit maximising prices and produce a higher quality product. These findings have implications for the UK speciality food sector.

Suggested Citation

  • Andrew D. Bugg, 2007. "Owner Motivations in the UK Speciality Food Sector," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-04, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2007_04
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    References listed on IDEAS

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    1. repec:bla:jindec:v:50:y:2002:i:4:p:431-56 is not listed on IDEAS
    2. Fiona M. Scott Morton & Joel M. Podolny, 2002. "Love or Money? The Effects of Owner Motivation in the California Wine Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 431-456, December.
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    Cited by:

    1. Mark AZAVEDO & John WALSH, 2018. "Artisanal Food Production And Marketing In The Perth Area Of Western Australia: Some Preliminary Indications Of Difficulties With Classical Economics And Supply Chain Theory," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(1), pages 47-57, May.

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    More about this item

    Keywords

    Speciality food; objective function heterogeneity; factor analysis; seemingly unrelated regressions.;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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